Sonoro Gold Corp Chairman John Darch has recently addressed shareholders to provide significant updates regarding the company's Cerro Caliche project and the changing mining policies in Mexico. This comes at a time when the country is transitioning to a new administration that is expected to adopt a more favorable stance towards the mining sector.
The letter highlights the appointment of moderates Marcelo Ebrard and Alicia Bárcena to lead the Ministry of Economy and SEMARNAT, respectively. These appointments are anticipated to bring much-needed clarity and stability to Mexico's mining sector, which had been unsettled by the previous administration's proposed constitutional amendment to ban open-pit mining. Sonoro Gold Corp's Cerro Caliche concessions are already owned by the company, and the potential ban on new open-pit concessions is unlikely to impact the project's future expansion.
Darch also shared updates from the company's 2023 Preliminary Economic Assessment (PEA), which has shown promising results. The PEA estimates that the Cerro Caliche project could support an initial nine-year open-pit heap leach mining operation. Initially, the PEA used a base gold price of $1,800 per ounce, but with gold prices hitting an all-time high of $2,450 per ounce in May 2024, the project's economic potential has substantially improved. According to the PEA, the project has a Pre-Tax Net Present Value (NPV5) of $116.8 million and an Internal Rate of Return (IRR) of 85%. With a gold price of $2,400 per ounce, an internal review estimates that the project's Pre-Tax NPV5 increases to $203.7 million, with an IRR of 129%.
These developments underscore the strategic positioning and robust potential of the Cerro Caliche project amid evolving regulatory and market conditions. The anticipated positive policy changes, coupled with favorable economic assessments, suggest that Sonoro Gold Corp is well-placed to capitalize on its mining operations in Mexico.
